Why Small Businesses Are Losing On Social Media

A new report from online business community Manta shows that, desperate to increase sales numbers in 2013, American small business owners are turning up on the social web in droves. The trouble is, no matter how much time they spend, they’re simply not seeing a return on investment.

Social media use is trending upward according to the survey of more than 1,235 small business owners, no surprise given the attention paid to the various social platforms by big businesses and media outlets. Nearly 50% have increased time spent on social media this year and nearly 55% say they’re using platforms like Twitter and
Facebook as a primary tool for either acquiring new customers of generating sales leads.

It all sounds promising until this head-scratching result: despite their dedication and belief that social media is the Hail Mary of small business owners everywhere, more than 60% of small business owners say they haven’t seen any return on investment from their engagement online. None.

“First of all, small business owners are being sold on the strategy of social by ‘experts’ who are trying to get them to pay to set up accounts,” Rubin says, talking, of course, of firms not unlike his own who manage social media platforms for businesses. “But more importantly, their expectations are being set up in the wrong way.” Set up, it seems, for failure.

First up, if an expert or strategist tries to sell you on the notion that setting up a Facebook page or Twitter handle (or even a LinkedIn company page) will open the floodgates to an Internet’s worth of sales leads, they’re selling you some bad medicine. “It’s not going to cut it,” Rubin says. “Social actually can be a powerful lead generator,” Rubin says, but not in the way SBOs think. Jumping online to check in on Facebook once a day or posting current sales deals isn’t going to bring the business in. It just isn’t.

Instead, he says the only real way to use social to bring in new sales is to dedicate a staffer (think low-level, he says, “Think your teenaged son or daughter.”) to spend some serious time online just listening. “If you’re selling insurance, or plumbing, carpeting or other services,” he says, “Listen for people who are complaining about their current service providers. Those are leads worth pursuing.” Filters and using social as a search tool can help, but the most critical factor here is time. According to Manta’s survey, despite the increase in time from 2012-2013, more than half of small business owners spend less than three hours a week online.

It’s frustrating, of course, this notion that you can’t simply set something up and watch the sales stream in—which explains the disappointment of the majority of business owners surveyed who say they aren’t experiencing a return on their investment in social. “Small business owners are being told social can generate leads and bring in new customers, so they often consider it as another direct marketing vehicle, like getting their company into a weekly ValPac or Penny Saver circular,” Rubin continues. Those directives are easy to measure. You spend $1000, you get 20 new customers as a result.

In contrast, social is a patience game, which for many can be a bitter pill. “Return on relationship takes time,” he says. “People are being sold on social as a place to generate leads, but it’s really a place to build loyalty, answer customer service questions and to build a community.” These things take time, he says, and commitment to the platform, but in his experience they have proven to be the value that does result in an increase in revenue. How? Through trust and loyalty.

“Any business owner small or large will say that’s the win,” Rubin says. “If people trust you they’re going to be loyal. If they’re loyal, their average order will be higher, the frequency of their purchases will be higher and the life expectancy of them as a customer will be longer.”

According to this survey from Manta, small business owners are eager to embrace social media, but they’re going about it all wrong—and it’s creating real discontent. Rubin—who has seen first-hand the results of social media marketing and building communities between brands and consumers—says that with a few subtle shifts in priorities and an adoption of the long-view, small business owners can put themselves back on the path towards success.. and sales.

“Small business owners have got to be thinking of their social presence as first and foremost an extension of what’s happening in their physical locations,” he says, whether it’s a storefront of service business. If customers come in for local gossip, then tear it up online, he says. “Facebook is a great place to extend your personality online so that customers existing and new feel connected.”

What Facebook isn’t is a portal to millions in instant revenue. Once small business owners can appreciate that, they’ll have a much better time of it—and long-term reap much more profitable rewards.

I spent four years as Forbes' Girl Friday, which to me meant doing a little bit of everything at once. As a member of the Forbes Entrepreneurs team, I looked at booming business and startup life with a female gaze. I worked on the PowerWomen Wealth and Celebrity 100 lists, k...